September was not a good month for price increases on most popular markets. Instead, it turned out to be a successful month for the market bears who decided to trade the markets short, which is also possible through CFDs.
According to the market data, September brought a decrease in the price of silver on a monthly basis by nearly 15%. Nevertheless, those who have been observing with disbelief the earlier staggering increases in the price of this metal could possibly gain, as the total price dropped by almost 30% from the peak. It seems that the strengthening of the U.S. dollar contributed to the decrease, but also the fear of global economic growth (silver is more of an industrial than an investment metal) or the taking profits from long positions.
In September, oil was also cut down, losing over 9 percent on a barrel of WTI. Nevertheless, compared to the volatility that we observed on this market in March or April, the current decreases of about 10 percent seem very modest. Oil seems to have been in the process of consolidation for a long time, and the events around the market may have a relatively small impact on it. Nevertheless, it was once again fear of a significant lack of demand growth that could cast a shadow over the price of black gold.
Also, the US stock exchange indices cannot count September as a successful month. The Nasdaq 100 index fell by more than 6 percent. The Dow Jones index of industrial companies went back by more than 5 percent, as did the broad market index S&P 500. In September, it turned out that very high demand was generated on the stock options market of US companies, including news about the huge exposure of SoftBank. Eventually, the air from the above-average inflated market started to drain, and the panic among retail investors seemed to lead to a greater correction.
It was the return to cash that seemed to strengthen the US dollar in September, whose index currently gains nearly 2% on a monthly basis. This also coincided with statements made by the European Central Bank's chief economist at the beginning of the month that the euro exchange rate was important, stopping the appreciation of the common currency, which has already started to exceed $1.20.
Without a doubt, September was a very interesting month on the markets, and October promises to be equally exciting as well. It is this month the fight for the seat of the President of the United States may intensify. We will also be entering the autumn-winter season, which may involve further economic restrictions. In addition, the issue of the EU budget and the aid package remains unresolved. According to Bloomberg, according to a spokesman for the German government, the historical EU budget of 1.8 trillion euros and the stimulus package may be delayed due to a dispute between member states on how to enforce democratic values. It was this dispute that also seemed to cause above-average fluctuations in the exchange rates of currency pairs with the Polish zloty.
Daniel Kostecki, Chief Analyst Conotoxia Ltd.
Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.
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